Microsoft, Compaq Debut iPaq Home Internet Appliance

The Internet is not just for PCs anymore. Microsoft and Compaq announced yesterday the creation of the new iPaq Home Internet Appliance, a smaller piece of hardware with a 10.1-inch flat-panel screen that offers cheaper and easier Internet access.

The new gadget will be powered by Microsoft's Windows CE operating system for smaller devices. It will come pre-loaded with software that allows one-touch access to Microsoft's MSN Internet service and can be turned on and off like a television.

The announcement is the companies' first step to providing simpler, non-PC devices for the home.

"Novice Internet users and particularly those wanting easy-to-use devices will appreciate its simplified features that allow them to maximize their Internet experiences," Mike Larson, general manager of Compaq's consumer products group, said in a statement.

The appliance will hit stores in the next two weeks and will sell for as low as $599. However, customers can receive a $400 rebate if they commit to buying the MSN Internet service for three years at a monthly rate of about $22, the companies said.

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